The NSW government has committed $244m to the Art Gallery of NSW’s Sydney Modern project.
Photograph: Art Gallery of New South Wales

The Art Gallery of New South Wales will be transformed into a “global museum of the future”, with the state government committing $244m to a contemporary expansion of the site.

The substantial investment, announced on Wednesday ahead of next week’s state budget, will link the existing 19th-century site in The Domain to Sydney’s Royal Botanic Garden, providing new spaces for art, live performance, film and education.

Construction will begin in 2019 and wrap up by 2021, in time for the gallery’s 150th anniversary celebrations.

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Plans to double the size of the gallery and expand it northwards toward the harbour were first unveiled in 2013 but have been marred by “budget shortfalls, competing visions and acrimonious infighting”, as reported yesterday in a New York Times article that prefigured the Sydney Morning Herald’s story on the announcement.

In 2015, the former prime minister Paul Keating attacked the proposed expansion as being “all about the idolatry of special events and the provision of commercial venues for hire, rather than about curating or exhibiting art. It is equally about capturing harbour views – as if this ought be the mission of an art gallery ... This is what it’s all about – money, not art.”

In his response, the AGNSW director, Michael Brand, called the criticism “inaccurate ... Art is at the heart of everything the gallery does and this remains the case with the proposed expansion.”

The Japanese firm SANAA’s rendering of the Sydney Modern project’s atrium. Photograph: Art Gallery of New South Wales

The NSW arts minister, Don Harwin, says the Sydney Modern project, designed by Pritzker prize-winning architects from the Japanese firm SANAA, is a “once in a generation commitment to major art and cultural projects”.

The standalone building will feature a prominent and innovative display of Aboriginal and Torres Strait Islander art and culture and will also incorporate the old oil tanks down by Woolloomooloo Bay, he said.

“For too long NSW has lost out to Melbourne and even Brisbane when it comes to attracting major international art exhibitions but that will change now,” Harwin said. “This funding will ensure Australia’s best art gallery is right here in Sydney.”

An image of the Sydney Modern project’s oil tank gallery, as produced by SANAA. Photograph: Art Gallery of New South Wales

As part of the agreement, the AGNSW will have to cough up $100m of private funding, with that target already close to being achieved according to the Archibald prize-winning Sydney artist and AGNSW board member Ben Quilty.

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“Patrons have been stepping forward and waiting finally for the minister to make that announcement,” he told ABC Radio on Wednesday. “You can’t have enough funding and, the way things are going, there needs to be that partnership these days.”

He said the gallery’s Indigenous collection was enormous but had been displayed in a transformed basement.

“We just need the space,” Quilty said. “We need to put the Indigenous collection at the heart of the way we look at art and contemporary art in this city, the state and the country.”

Brand said the expansion would not only expand the display of the artworks in their collection but would double school student visitors to the gallery to 200,000 a year.

The government has also announced a $100m fund to support art and cultural projects in regional NSW.